Saturday, 5 September 2009

Airtel has entered into a strategic tie-up with IFFCO (Indian Farmers Fertilisers Cooperative) for providing agriculture and allied information to farmers through mobile phones. The facility was formally launched by the Chief Operating Officer (Andhra Pradesh) of Bharti Airtel Limited, Rajnish Kaul, at a function at Anakapalle town, about 40 km from here on Tuesday.

Addressing a media conference on the occasion, he said that the unique facility would benefit over 10 lakh IFFCO society members of rural Andhra Pradesh by giving them access to vital information. The farmer members would be given five free voice messages on farming techniques, weather forecasts, dairy farming, animal husbandry, fertilizer availability and rural health initiatives.

Mr. Kaul said the farmers could also call a dedicated free helpline to get answers from a qualified veterinarian to their specific queries regarding the health of their animals. He said that SIM cards would be provided at subsidised rates and lifetime activation would be done for a mere Rs.47. Calls between the members would be charged at 50 paise a minute. The SIMs would be compatible with any mobile handsets and farmers could buy the handsets of their choice depending on their purchasing power. He said the facility was launched about six months ago in various districts of the State and there were already 65,000 connections.

Question Box provides a service in India and Uganda. In India, phone boxes are installed in slums and villages that connect users to operators that will answer questions. In Uganda, users can call in from any mobile phone and ask their questions. The operators have access to a repository of previously asked questions (and their answers), and they can also occasionally consult the Internet. A special search engine and database were also built specifically for the project.

Another initiative, Avaaj Otalo, provides an audio community forum for farmers in rural Gujarat, India. Working with an organization that produced a popular radio program, Otalo provides a call-in number where farmers can exchange questions and answers. Users are also able to listen to archives of the radio program.

These projects differ in that Question Box avoids having to process users' questions by adding a human listener in the loop; Avaaj Otalo avoids processing by organizing their collection of audio prompts with into a menu. Both programs, however, have yet to deal with the problem of cost because they subsidize the service for users. Otalo operates with a toll-free number and Question Box provides the phones to call from in India. In Uganda, Grameen Community Knowledge Workers provides the mobile phones.

It's easy to see why the fishermen of the southern Indian state of Kerala captured the attention of a Harvard economist when they began using mobile phones a few years ago to track prices in the markets where they sold their catch of the day. Observing how these devices can be used to promote economic growth, Robert Jensen wrote in a 2007 paper titled, "The Visible Hand(set): Mobile Phones and Market Performance in South Indian Fisheries -- The Micro and Mackerel Economics of Information," that "before mobile phones, deciding which [market] would offer the best price was sheer guesswork." With mobile phones, however, suddenly it became an information-based decision. What's more, noted Jensen (who is currently at Brown University in Rhode Island), "it's not a zero-sum trade-off." The fishermen's customers benefitted from lower prices and greater choice, and there was less waste since the fishermen could easily identify the villages that would have the greatest demand for their fish each day.

Now Jensen's "visible handset" is reaching further into rural India. Following a nationwide launch this summer of Nokia Life Tools (NLT), India's farmers can use their mobile phones to access tailored information to help them grow, harvest and sell their crops and manage their livestock. "There is no reason why farmers should not be as successful as fishermen," says Ravi Bapna, associate professor of information systems at the Carlson School of Management in Minnesota and executive director of the Centre for Information Technology and the Networked Economy at Hyderabad-based Indian School of Business (ISB).

Consider Ravindra Shinde, a farmer in Magardhokada, a village in the Nagpur district of Maharashtra. When he recently harvested 125 quintal (a quintal is 100 kilograms) of soybeans and was about to take the crop to market, the price was $32 a quintal. But then he received a message on his handset that soybean production in the U.S. and Argentina had fallen, so he held back and later sold his crop for $48 a quintal.

IN the early 1990s, I was engaged in an empirical research work relating to the nexus between mobile phone and poverty in rural Bangladesh. However, friends used to tease me and raise their eyebrows on hearing about the project and my interest at that time. This was to be expected in the early 1990s when, not to speak of the poor, even the "solvent" could not afford to have a mobile set. It was treated as a "luxury" item, only to be monopolised by the moneyed people. My research findings on village pay phones of the Grameen Bank at that time -- and as published in international journals in subsequent years -- clearly showed that mobile phones could help the poor escape "rural penalty" (a la H. Hudson), defined as poverty mainly due to distance, poor connectivity and asymmetric information. However, as of today, about 40 percent of the rural households in Bangladesh are reported to have access to mobile phones and roughly one-fourth of the users are poor. Rickshaw pullers, fishermen, traders all use it to minimise information asymmetry and quicken communication between two points.

About a decade later, I was invited to comment on two research papers showing the impacts of mobile phones on farmers and traders in Africa.The first paper was by Megumi Muto and Takashi Yamano, both representing JICA and Foundation for Advanced Studies on International Development (FASID). They drew upon panel data of rural Uganda where banana producers could reduce marketing costs and raise income with expansion of mobile phone coverage. The message is that the expansion of mobile networks increased market participation and sales of the perishable product, banana. More importantly, small producers and farmers in remote areas gained the most.

As information flow increases due to the expanded mobile phone coverage, the cost of crop marketing is expected to decrease, particularly in remote areas where potential marketing gains from the increased information flow is large. We indeed find that the network expansion has a larger impact in market participation in areas farther away from the district centers than in closer areas.

The second paper was presented by Jenny C. Aker of the University of California, Berkeley, on the impact of mobile phones on price dispersion of grains in Niger. Using a sequential searching model, the researcher observed that cell phones increased traders' reservation sales price and the number of markets over which they searched. This reduces price dispersion across markets. To be specific, grain price dispersion reduced by 6-7 percent and reduced intra-annual price variation by 10 percent.

What is important, and as revealed in both papers, is that every farmer need not possess a set. It could be the community, producers' organisations and others from where the price information could spread, either as a "public good" or as a "private good." A participant from the audience in that seminar informed us that in his village in Africa, a mobile phone is hung from the branch of a tree and interested persons could use it on payment of a fee. Second, even with access to mobile phones, full gains might not be reaped as farmers might need more information. The role of public authority and media in this respect is very important. Again, producers' organisations could form an information forum of their own to be more effective at bargaining than individual initiatives.